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The recent upheaval in the office-equipment retail business,

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The recent upheaval in the office-equipment retail business, [#permalink]

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The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business, has been attributed to the advent of office equipment “superstores” whose high sales volume keeps their prices low. This analysis is flawed, however, since even today the superstores control a very small share of the retail market.

Which of the following, if true, would most weaken the argument that the analysis is flawed?

(A) Most of the larger customers for office equipment purchase under contract directly from manufacturers and thus do not participate in the retail market.
(B) The superstores’ heavy advertising of their low prices has forced prices down throughout the retail market for office supplies.
(C) Some of the superstores that only recently opened have themselves gone out of business.
(D) Most of the office equipment superstores are owned by large retailing chains that also own stores selling other types of goods.
(E) The growing importance of computers in most offices has changed the kind of office equipment retailers must stock.

My Answer was 'D' (later i realized that it is wrong) Correct Answer is 'B'
According to 'B' Heavy advertising by superstores has made the furniture prices to go down. if this is true then superstore's market share must be substantial which is contradicting Premise 3 since even today the superstores control a very small share of the retail market. because according to Premise 1 The recent upheaval in the office-equipment retail business, in which many small firms have gone out of business small firms have already gone out of buisness.
In CR - as per my knowledge - we are not allowed to refute the premise while weakening the argument.
Pls Explain!
[Reveal] Spoiler: OA

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Last edited by carcass on 05 Jun 2017, 08:26, edited 1 time in total.
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Re: The recent upheaval in the office-equipment retail business, [#permalink]

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Hello from the GMAT Club VerbalBot!

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Re: The recent upheaval in the office-equipment retail business, [#permalink]

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New post 05 Jun 2017, 07:45
carcass wrote:
B says that superstore have huge ad for the publicity. So have lower price, so is not the control of retailer the reason but the aggressive strategy

Please follow the forum's rules, third point

http://gmatclub.com/forum/rules-for-pos ... 34642.html

Thanks.



Hi Carcass,

Kindly help to explain in detail why b is the answer.

We have to prove that analysis is not wrong. And high sales volumes indeed led to their low.

Unable to make anything out of it.

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The recent upheaval in the office-equipment retail business, [#permalink]

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New post 05 Jun 2017, 08:35
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This is a business law & economies of scale: more quantities sold permit you to cut the costs and being more competitive.

If you are so strong to low the prices in a systemic way, which means throughout the entire distribution chain. This means you are strong enough to lead the market. So B is the answer.

A real example could be Ikea.

Hope this helps.

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The recent upheaval in the office-equipment retail business,   [#permalink] 05 Jun 2017, 08:35
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